By SM Farid Mirbagheri
THE recent decertification of the nuclear deal between Iran and the Five Plus One by President Trump has effectively put an end to the agreement. The return of sanctions on the Islamic Republic of Iran and on those breaching them by the largest economy and the most powerful military in the world means all countries and companies will probably observe them. Iranian Foreign Minister’s shuttle diplomacy between Beijing, Moscow and Brussels to persuade the Europeans, Russia and China to keep to the agreement despite Washington’s withdrawal is unlikely to yield any results. Those countries, including the UK, France and Germany, have already expressed their serious doubts on the viability of the agreement without the United States.
Access to an economy of around a few hundred billion dollars a year – Iran – is not worth risking deprivation from an economy of about 7 trillion dollars per annum – the United States.
So what options are open to Tehran? Can its suffering economy withstand the unravelling of the JCPOA – The Joint Comprehensive Plan of Action – otherwise known as the nuclear deal with Iran? The answer to that question is probably no.
Bar a miracle all economic indicators point in the direction of a deepening economic and financial crisis. Sanctioning Iranian oil and financial transactions would serve a severe blow to Tehran.
The national protests of last December and January were triggered by economic hardship and could again engulf the country. The working class who usually formed the core of the support for the establishment in the past appear to have turned into angry protestors demanding radical changes. The passage of time without change will likely radicalise them further.
Iran will be anxiously watching two particular sectors: energy and financial services. If the sanctions extend to Iran’s sale of oil and gas and if financial services such as SWIFT are withheld from the country, as they were before the nuclear deal, then one can reasonably assume that the Iranian economy will in all likelihood grind to a halt. International giants such as the French Total and the German Siemens have already stated their intention to stop all operations in Iran. Others have followed suit.
In the realm of foreign policy, the news for Tehran has not been encouraging either. In the Syrian civil war, where Iran has invested heavily in terms of personnel and finances, news have been rather unwelcome. The massive Israeli retaliation to 20 Iranian missiles fired at the Golan Heights on May 9 managed to destroy or seriously damage some 50 infrastructural complexes of the Iranian Revolutionary Guards in Syria. This could not have been carried out without the acquiescence of Russia, which Iran considers a partner in the war-torn country.
Another blow was the triumph of Moqtada Sadr’s Saeroon Alliance in Iraq’s recent parliamentary elections, where Iran had committed many resources for the victory of the rival Fatah group. Sadr has in recent years been particularly critical of Iranian influence in Iraq and used that as one of the pillars of his campaign.
The military setback in Syria and the political retreat in Iraq, even if temporary, are hallmarks of serious drawbacks in the foreign policy of the Islamic Republic. Together with the dire economic conditions at home and the serious prospects of nation-wide protest they do not paint a rosy picture for the immediate to mid-term future of the Iranian government.
A return to uranium enrichment, though an option, is unlikely for two reasons: First the risk of a retaliation of some sort by the United States as President Trump has indicated; and the world has learnt to take him at his word. And secondly the financial cost of restarting the whole process is an impediment in the current financial crisis. Conditions remaining the same Iran may fast be running out of options.
Professor SM Farid Mirbagheri is professor of international relations and holds the Dialogue Chair in Middle Eastern studies at the University of Nicosia